EU Wheat Close - Higher Again

26/01/11 -- Mar London wheat closed GBP2.50 higher at GBP203.50/tonne, with new crop Nov GBP2.35 higher at GBP174.85/tonne. Mar Paris wheat rose EUR3.50 to EUR266.00/tonne, whilst new crop Nov climbed EUR2.75 to EUR234.00/tonne.

Amongst an assortment of records that was the highest front month close for London wheat ever, a lifetime contract high close for new crop Nov - almost certainly making off the combine harvest wheat the highest that it's ever been too.

Not to be too outdone, Mar Paris wheat also closed at the highest for a front month in 34 months.

Algeria bought another ruck of wheat today, booking 800,000 MT to bring it's total purchases to 1.8 MMT in the past month alone. Iraq and Saudi Arabia are also in the market, and expected to book volume with Egypt seeming increasingly likely to also enter the fray sooner rather than later.

Spain is reportedly eyeing buying Australian feed wheat, providing that the EU Commission don't see fit to impose an import levy on it.

The pound seems to have stabilised after yesterday's heavy losses following a dismal drop in GDP in Q4 of 2010. Further depreciation would obviously be supportive for UK wheat, not that we have anything much left to sell.

Brussels will report tomorrow on EU wheat export licences for the past week, another big number could provide a further leg-up for the market.